Rohit Sarkar
Co-Chair, CII Eastern Region Startup Subcommittee and Co-Founder; Distronix
From Innovation to Scale: What Indian Startups Must Focus On
India today stands as the world’s third-largest startup ecosystem, home to over 100 unicorns and a rapidly maturing innovation landscape. Global supply-chain realignments, often framed through the “China+1” strategy, have opened a significant window of opportunity for India. Major global corporations are expanding manufacturing footprints in the country, reinforcing India’s growing role in global value chains. However, to fully leverage this moment, India must move beyond being perceived as an alternate manufacturing base. The larger ambition should be to position India as a primary global innovation hub—where products are not only manufactured, but also conceived, designed, and engineered.
The Make in India initiative has successfully strengthened India’s manufacturing capabilities. Yet, long-term competitiveness depends on moving up the value chain. Despite being the second-largest mobile phone producer globally by volume, much of the core product design and intellectual property continues to originate outside India. Remaining focused only on assembly risks locking startups into low-margin segments. The next phase of growth must therefore emphasize a shift towards Designed in India. Indian startups need to invest deeper in R&D, original product development, and indigenous IP creation. Encouragingly, this transition has already begun, with global and Indian firms establishing design centres in India and launching products conceptualised locally. Prioritising frugal engineering, systems-level innovation, and strong IP portfolios will help transform India’s image from a back-office economy to a source of world-class products and global brands.
Bridging the gap from innovation to scale, however, requires a strong and coordinated policy ecosystem. Infrastructure remains a foundational pillar. Inadequate logistics, fragmented supply chains, and power reliability challenges continue to constrain startups attempting to scale manufacturing. Sustained government investment in industrial clusters, technology parks, and logistics infrastructure is critical. Targeted initiatives such as the Production Linked Incentive (PLI) scheme—especially in electronics, semiconductors, and electric mobility—have demonstrated how policy can accelerate scale. Ensuring greater participation of startups in such programs will help shorten the journey from prototype to mass production.
Equally important is access to patient capital. Scaling innovation—particularly in deep-tech, hardware, and science-led sectors—demands long-term funding horizons. In this context, the Research, Development and Innovation (RDI) scheme anchored by the Anusandhan National Research Foundation (ANRF), with a proposed outlay of ₹1 lakh crore, is a landmark intervention. By supporting translational research and commercialization, the ANRF-led RDI framework can play a catalytic role in converting laboratory breakthroughs into market-ready products. Complementing this with incentives for domestic venture capital, fund-of-funds structures, and smoother access to global capital and public markets will further strengthen India’s investment ecosystem.
Finally, regulatory clarity and ease of compliance are essential to unlock scale. Simplified regulations, predictable tax regimes, faster approvals, and regulatory sandboxes for emerging technologies can significantly reduce friction for startups. While several states have introduced progressive startup policies, a cohesive national framework focused on innovation-led growth will provide founders the confidence and freedom to build responsibly from India.
As India marks National Startup Day, the message is clear: the country must translate entrepreneurial energy into global impact. By moving decisively from Make in India to Designed and Manufactured in India for the World, and by aligning infrastructure, capital, R&D, and regulatory support, India can move beyond the China+1 narrative and emerge as a standalone global leader in innovation and manufacturing.
The Make in India initiative has successfully strengthened India’s manufacturing capabilities. Yet, long-term competitiveness depends on moving up the value chain. Despite being the second-largest mobile phone producer globally by volume, much of the core product design and intellectual property continues to originate outside India. Remaining focused only on assembly risks locking startups into low-margin segments. The next phase of growth must therefore emphasize a shift towards Designed in India. Indian startups need to invest deeper in R&D, original product development, and indigenous IP creation. Encouragingly, this transition has already begun, with global and Indian firms establishing design centres in India and launching products conceptualised locally. Prioritising frugal engineering, systems-level innovation, and strong IP portfolios will help transform India’s image from a back-office economy to a source of world-class products and global brands.
Bridging the gap from innovation to scale, however, requires a strong and coordinated policy ecosystem. Infrastructure remains a foundational pillar. Inadequate logistics, fragmented supply chains, and power reliability challenges continue to constrain startups attempting to scale manufacturing. Sustained government investment in industrial clusters, technology parks, and logistics infrastructure is critical. Targeted initiatives such as the Production Linked Incentive (PLI) scheme—especially in electronics, semiconductors, and electric mobility—have demonstrated how policy can accelerate scale. Ensuring greater participation of startups in such programs will help shorten the journey from prototype to mass production.
Equally important is access to patient capital. Scaling innovation—particularly in deep-tech, hardware, and science-led sectors—demands long-term funding horizons. In this context, the Research, Development and Innovation (RDI) scheme anchored by the Anusandhan National Research Foundation (ANRF), with a proposed outlay of ₹1 lakh crore, is a landmark intervention. By supporting translational research and commercialization, the ANRF-led RDI framework can play a catalytic role in converting laboratory breakthroughs into market-ready products. Complementing this with incentives for domestic venture capital, fund-of-funds structures, and smoother access to global capital and public markets will further strengthen India’s investment ecosystem.
Finally, regulatory clarity and ease of compliance are essential to unlock scale. Simplified regulations, predictable tax regimes, faster approvals, and regulatory sandboxes for emerging technologies can significantly reduce friction for startups. While several states have introduced progressive startup policies, a cohesive national framework focused on innovation-led growth will provide founders the confidence and freedom to build responsibly from India.
As India marks National Startup Day, the message is clear: the country must translate entrepreneurial energy into global impact. By moving decisively from Make in India to Designed and Manufactured in India for the World, and by aligning infrastructure, capital, R&D, and regulatory support, India can move beyond the China+1 narrative and emerge as a standalone global leader in innovation and manufacturing.
